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building them to last. siemens, answers. ♪ [ music ] e one. doubling down on debt. for years the debait in this town has raged between reducing our deficits at all costs, and making the investments necessary to grow our economy. this budget answers that argument, because we can do both. >> president obama's $3,788,000,000,000 budget blueprint is a game changer. here are highlights from the 2500-page document. item. taxes. up $1 trillion dollars over ten years. that's on top of this january's $600 billion tax hike. item. domestic spending. up $1.058 trillion total. repeals the sequester, cuts,

funds preschools, highways, green energy. item. defense spending down $500 billion. bases closed, weapons canceled. thousands of jobs cut. higher medical fees for veterans. item, social security crimped. new cost of living the so- called chained cpi, cost retirees $130 billion over ten years. item. medicare. cut. $370 billion. doctors lose pay, seniors pay higher premiums and fees. these cuts are on top of the $700 billion obamacare cut from medicare's budget. item. public debt doubles. public debt soars from 40.5% of gross domestic product in 2008 to 78.2% of gdp, in 2014. under obama's budget, by 2020,

the national debt ceiling will exceed $25 trillion. question. is this budget the basis for serious negotiations with the republican leadership? or is it a political ploy? pat buchanan? >> no i think he did throw out a card john with the social security chain cpi. but i don't think it will go anywhere for this reason. the president has tax increases in there the republican house simply cannot abide and go home and survive. he is not going to get those tax increases. secondly, this chain cpi, already has a fire storm inside the democratic party against him for going after social security and medicare. so i think he put this out here. but john the real long-term problem medicare, medicaid social security eat up more and more and more of the budget. you mentioned defense and discretionary spending go down less and less and less. and i think it is, you know, this is no new deal or no new

frontier or no great society. it is a timid budget, i think. and it is a grim budget for the united states. the cpi is the consumer price index. make your point again about that. >> well chain cpi, what it is,. >> chained. social security is indexed. cost of living increased, in the nixon administration we did it you tie it to wage growth. republicans say it should be tied to prices. chain cpi is sort of a mixture, as i understand it, of the two. in other words the increases every year in spending for social security will not go up quite as rapidly as they did, but it is only a cut of 1% in total social security in ten years. >> is he going to leave it that way? >> i think republicans, republicans might go for this but democrats won't. >> eleanor? >> it is not a radical budget actually, it is a reasonable budget. the tax increases he is calling for are capping deductions and closing loopholes, which is what mitt romney ran on and what republicans have supported in

the past. so this is well within the bounds of negotiations that have already gone on. secondly, it is unprecedented for a democratic president to lead the charge on trimming entitlements, and yes he is getting push back from his party. the reason the president put that out there is to see if the republicans can say yes to anything. they have demanded this chain cpi, they have demanded he aggressively go after entitlements, and now they are sitting back and are not so sure they want to say yes to anything. so what the president is doing is looking for a third column with republicans outside of the leadership. he has dinner with the dozen, he has had some success on other issues. peeling off republicans on guns, peeling them off on immigration and creating this column of republicans that he can work with in the senate that, if they can then get something passed in the senate, they can put pressure on the house, where democrats would carry the day on passing something in the house. it is a pass, it is a risky path but it is there and i think the

president is working it really hard and has the republicans on the defensive. >> are you a smoker? >> no i'm not. >> you know the president wants to put a syntax on cigarettes? >> there have been many taxes on cigarettes. this republicans would argue is a tax on people who are really the lower wage earners. >> going to pay for universal preschool. isn't that a good objective? >> it has shown it does nothing to advance children academically beyond the third grade. >> is it the ultimate nanny state? >> ask mayor bloomberg what he thinks of the tax. i think we are becoming a nanny state. the problem is we are expected to cover healthcare costs for people as they get older, on the other hand we don't want to tax them or do anything to affect their health when they are younger. this is a tax on working class americans. 94-cent tax on cigarettes for people who earn $40,000 a year on average. >> do you have a larger point on the whole package? >> on the whole budget itself, the president put out entitlement reform. when has that ever happened?

the republicans say they would go for a change in the cost of living adjustment if it was a part of larger deal on tax reform. it is not. what it will amount to a tax increase. a republican or two has said this is going to be a tax increase but it does throw out the idea of entitlement reform. they are trying to strike a deal on entitlement reform. they have been having dinners, talking. here it is in informal form. in 15 months we are going to have an election. and we are going to reelect the house of representatives. >> do you think any of this is geared to win that election away from the republicans and for the democrats? >> i think without question. i mean that is the nature of the game i suppose. there is no doubt but this is an intended, in a sense to give the american public the sense the president is really trying to do something about the deficit and making some gestures toward a compromise. in fact, i don't believe that is the kay. in terms what have we need to do.

and we are just so far from dealing with this issue. people who follow this know this. and this is the sad part of it. because sooner or later it is going to blow none our faces. you talk about the cost of living index. the way we do it now is, it is an inaccurate cost of living. it is just the wrong formula. this is considered to be a concession? that is ridiculous. it is just ridiculous. and we are so far from getting the budget deficits under control, that is equally ridiculous. so i'm totally dismayed by it. >> this is big government spending involved here. and with a don lack of demand. >> i think there should be a significant reduction in the special benefits that help the wealthy. >> mort, let me tell you, mort is exactly right. >> hold on. just a minute.

>> mort is exactly right. you not only ought to index colas for inflation, you should have a two year moratorium on all indexing for folks like me. increase the age of retirement. what we need is a margaret thatcher in there, willing to take the heat. if we don't get somebody like that john, we are really headed down the road to a disaster. eleanor? >> he hasn't gone as far as you all want. he put something out there and he is getting back basically a slap from the face. because the republicans don't want to own these cuts either. >> the republicans gave him credit. they credited him for putting it on the table jute chairman of the republican campaign committee said if they were going to run after democrats for trying to balance the budget on the backs of seniors, which is so blatantly hypocritical even speaker boehner called him out. >> under the u.s. constitution

the president proposes, the congress disposes. meaning congress alone holds the power of the purse. not the president. what should congress do with the obama budget? use it as a starting point or shelf it and start all over again from scratch. >> if i were the republicans in the house i would accept this initial offer on social security and see if we couldn't go further and work to get a deal. i would not slap him in the face the way craig sheldon did i guess. >> you would go along with the social security? >> look i think we really need something on social security really to save the system and to stop draining everything else, yes. >> it is an untouchable. >> that is why we have got a problem. >> we are going to eventually not have that. >> you can live with it john. but the guys who are 30 years old can't. >> actually, social security has nothing to do with the deficit. it actually is doing fine. all they would have to do is raise the cap and get a little

bit more money out of people at the high-end like pat and a lot of other people. medicare and medicaid are a problem and they do have to be reigned in. this is a starting point. the president has found republicans particularly in the senate willing to work with him. you have other budget milestones coming up over the summer. they have got to come up with something around the debt ceiling so yes, i think they are going to get a deal. >> they may get something on social security or mild reform on medicare. probably not much beyond. >> it will politically damage them? >> i think it will be a neutral effect. both sides will be in it. >> have you heard of the aarp? >> yes, i have. >> you know the power of the aarp? >> i think they can probably be convinced to buy in. >> you want to make a bet on that? >> he got them in on healthcare reform. i think anything is object. >> don't touch social security. >> i agree at some point we are going to have to raise the eligibility age for social security. >> that may be a little bit

different and more suite and that could conceivably work. other than that. >> given the longevity that is going to be very. >> that is subtle but it needs to be done. >> it is going to hit seniors. >> about to be seniors, exactly. >> the baby boom. >> are they really going to focus on it? >> you have 70 million baby boomers headed into retirement right now over the next 18 years. >> that is a sizable number. >> we exhausted it? >> yes. >> i don't think we have exhausted it. >> no we have not. it is going to come up again and again and again, it is let me ask you this as a as a hypothetical question that could become a reality. north korea is continuing to resist, even by today's papers. the feeling is it is on the threshold of getting the bomb if it doesn't have the bomb. if it is discovered with certitude that they have the bomb, could you see the u.s. taking unilateral action?

>> i think first the united states would probably go into the south with china which has great influence over north korea as you know. you need to have a look at all of the other surrounding circumstances, including views of south korea, which after all is next door. >> 1993, the lady margaret thatcher. 20 years ago. great britain's esteemed iron lady died this week but her wisdom lives on. north korea now has its nuclear weapon. this year 2013 marked north korea's third nuclear test in seven years. the bomb used in anywhere from 6 to 9 kilotons of tnt. north korea is continuing to amp up its bellicose threats so in the last months the u.s. has counter amped. deploying stealth fighter jets, stealth bombers, u.s. warships, radar platforms and more in the environs of the north korea an coast. in fact we do it every march

and april. ship and air movements there part of the u.s. joint military exercise with south korea a key ally to the u.s. maneuvers now in their 16th year. the exercises take place in the sphere of influence of north korea and south korea. an area around which a nation view as a region under its control. >> question. so, who is provoking whom? pat buchanan? >> john, i think the provocation here is clearly north korea. we have held our annual exercises with south korea. but this is the first time they have threatened nuclear war, he has canceled the truce with the united states, he has a bomb with atomic weapons. he is doing there consciously and deliberately and we are not sure why. one reason, people argue, is he wants to get street credit with the military in his own country. he is only 29 or 30 years old. but the united states, i think is fairly, we haven't handled it perfectly, but is fairly blameless in this situation.

the problem john is a very simple one. how does this guy crawl back off the ledge he has crawled out on? he doesn't have the expertise his father and grandfather did and he is way further out than they were were. >> can anyone ever recall a analogous situation where the united states became concerned with dale once -- with happenings in our backyard, instance is russia, to get out of our backyard? it is a sphere of influence so too in this instance over in korea, there is a sphere of influence there and the sphere of influence is on the part of north korea. it is their sphere of influence and we are over there provoking them defacto by our exercises with south korea. >> john, i do think that the role of the united states here is not to provoke, if i may say so. this has been going on for a long time. we realize, there is some, i don't know quite how to describe the new leader of north korea, who is very young, as pat says, who is very inexperienced,

trying to establish his credibility with the military in north korea. but playing a very dangerous game there because this is not going to end well for north korea. >> well he is more bellicose than his father and grandfather were, and he is not as skilled at brink plan ship. so there is some cause for alarm. but look we have deterred north korea for 50 years. we are going to continue to deter them. if they were to launch any kind of attack, they would be so repudiated and i don't think they are suicidal. they want to maintain their power. and i think the administration is handling it pretty well. this is not like the cuban missile crisis, which is what you are referring to. >> i'm referring to 2008. russia and venezuela conduct joint maneuvers. russia sent venezuela, you know, below our southern border. russia sent two 160 strategic bombers, 1000 troops, warships, including the peter the great

missile cruiser. the move by chavez and putin was widely regarded as provocative with tensions of u.s. military visits. we are being provocative with north korea. why do we do that? >> you know where this comes from. this comes from a war that happened. called the korean war and we are determined to make sure that doesn't happen again. >> we kicked the russians out of our sphere of influence. >> we also did it with cuba, if you recall. >> and we are a super power and we have a presence in that part of the world. >> we take the same principle applied to us and suddenly doesn't work in nark when we are in the waters of nark. >> let me agree with you. i think 60 years after the end of the korean war and 20 years after the end of the cold war the united states should have moved its ground forces completely off the korean peninsula and maintained air

and naval support in backing up our treaty. because to this nut ball in north korea the presence of 20,000 americans sitting as close to seoul korea as dulles airport is to washington he considers that a provocation and i think he wants to provoke the americans and get them off the peninsula, get them to recognize them and get foreign aid. i agree with you we ought to get off the peps la but we can't do it in a crisis. >> you recognize the legitimacy of the sphere of influence of nations? >> this is china's influence not the united states. >> is it not a common understanding, stated or unstated, mostly unstated but still clear that does control the activities of countries? >> it is a little tiny country of 22 million and we are a country of 310 million. >> so we can assert ourselves wherever we want? this is bully america? >> north korea has a million man army. i don't think they are that worried. >> excuse me please.

>> by our little 28,000 troops over there. and we are not going to turn tail and run and leave our allies behind, and the u.s. foreign policy is to have some influence in asia. we are shifting from the middle east to asia. so if you want to make all these changes, you are going to have to deal i think with the future president. >> you know north korea and south korea were at war and an armistice was created and the armistice is still in force. so north korea and south korea, that element as north korea looks at south korea and south korea is then viewed as in bed with the united states, in conducting these exercises, so it all becomes even moreen raging to the nark -- to north korea. >> why is no one talking about north korea is developing nuclear weapons at an increasing rate? >> for its own defense. >> they now say they are taking aim at japan and japan will be their first target.

why should the u.s. not be there to at least show our strength and power in defense of our ally japan? >> if this is the case, south korea and japan, who are very powerful rich nations a lot stronger than north korea, build their own nuclear deterrents? that is exactly what is going to happen john. this guy he doesn't have it yet, but he is getting close to be able to put nuclear weapons on intercontinental ballistic missiles. >> on my part this is not for north korea by any means, but i do see we are exerting a what? we are exerting a kind of taunt against them. and it is only serving the interests of those, it is not serving their interests. >> it is like chinese troops on the mexican border? are you saying? >> i think there is some comparison to that. a question on a nuclear proliferation scale, north korea

negotiates and gives up its nukes, 10 meaning no negotiations and the regional nuclear arms race, what is the most probable outcome of this crisis pat buchanan? >> they are not going to give up their nukes. they never will. but i think south korea and japan will be moving toward nuclear capability themselves. >> they have a very minimal nuclear capability, which they won't give up. and i think the challenge now for this president and the future president is to keep that arms race from developing. i don't think the other countries really want to get into it. >> as of right now i don't see them letting up on trying to develop nuclear capability. i think we see signs now they are going to keep trying to advance it. >> north korea is definitely going to pursue its nuclear capabilities. the re iraq war, ten years later. >> one of the most symbolic images from the u.s. invasion of iraq was the toppling of the

statue of saddam hussein in firdos square in central baghdad with an american flag draped is >> my captain comes over and has got like this package. he hands it to me tells me there is an american flag in there, y he is like show the boys the colors. >> after the showing of the colors, the statue was toppled. at the base of the statue, helping to pull it down, was iraqi blacksmith kazem al jabouri. al jabouri on that day was angry because the draped flag was not an iraq one. today he no longer lives in iraq but in beirut, lebanon, because baghdad is dangerous. and al jabouri's views on the war have radically changed. >> saddam hussein, he said, maybe held us 100 years back.

but now we are pushed back almost 300 years. >> al jabouri now says if the statue of saddam still existed, he would re-erect it. >> chin understands why iraqis feel hopeless over the war. >> there would probably be a lot of questions from them. why did we do it? you know, what were we there for? and it would very hard for me to answer those questions too. >> reporter: u.s. combat troops were in iraq from march 2003 to december 2011. nearly eight years. 4422 u.s. troops were killed. 31,926 were wounded in action. at least 134,000 iraqis were killed. millions were displaced and iraq's infrastructure destroyed. war operations cost the u.s.

$806 billion. that figure climbs even higher to $1.7 trillion with the u.s. government providing care to our veterans, disabled by the physi psychologically disabled. >> question. iraq today has a democratic form of government instead of a dictatorship. does that justify america's intervention? i ask you susan? >> i think there is really a question of what kind of december mock crasssy there is in iraq right now. i have read all kinds of accounts that women's rights have been setback even further than they were under saddam hussein and that so much division amongst the three main groups there, religious and political and otherwise, that it is things there are still pretty much a mess. i don't think, i think the reasons for going in there, of course everybody questions why we were there, obviously. but i think the larger question is, you know, what we did after we got to iraq and the poor job

in executing the efforts to try to get the country in shape. it is not in shape. i'm just not sure what the u.s. can do about it right now. >> we went in under false pretenses. the footage you showed, that was an american public relation ploy, where they tore down the statue, put up an american flag. that is the tipoff fit had been an iraqi uprising there would be an iraqi flag there. we have spent all this money, squandered lives american and iraqi, in order to embolden iran. it is the biggest foreign policy blunder maybe in u.s. history. >> i think eleanor is right the greatest foreign policy blunder in american history. john what did we do? we attacked, invade and occupied a country which did not threaten us, did not want war with us. did not attack us. to do what? deprive it of weapons it did not even have. what is the moral justification for those. >> in addition to that we were not ab them? >> i think it will be a

predictions pat? >> he is not the best looking attorney general in america, but ken of virginia i think is going to win the governor ship now because terry mcall live has real problems. >> eleanor? the newtown families and gabby giffords are in the gun debate to stay and over time, their voices will be more powerful that be the nra. the culture of guns is beginning to go through a transformation in this country. susan? >> i predict the senate will pass a limited expansion of background checks on gun purchases within the week. >> you approve of that? >> i, i don't approve or disapprove. it is going to be a very limited expansion. >> spoken like a true journalist. mort? the suggestions the federal reserve bank is going to cut back on the monetary easing is absolutely over with. they are definitely going to continue. i predicted the stock market